The Quick Read: This is a mortgage refinance that is underwritten using about 12 months of bank deposits instead of traditional personal-income documentation. It is built for self-employed owners whose traditional personal-income documentation shows far less income than their accounts do. Select lenders in Lendmire’s wholesale network go up to 90% LTV on a primary residence, subject to lender guidelines. It is a tool for your own home.
Key Takeaways
- Income comes from deposits. The lender averages 12 months of business or personal statements, then applies its own expense factor to business accounts.
- Leverage is highest on a primary residence. Up to 90% LTV on a purchase or rate-and-term refinance, and the top of that range goes to stronger files.
- Investment cash-out tops out near 75% LTV. Leverage on an investment purchase varies by lender.
- Occupancy decides everything. Owner-occupied homes follow one set of rules. Pure rentals usually move to DSCR underwriting.
- It is documented lending. The bank records are the proof, so “no documents” is the wrong mental model.
What Is a Bank Statement Refinance Loan?
It is a refinance where your deposits stand in for W-2s, pay stubs, and traditional personal-income documentation. You pay off your current mortgage with a new one, and the new loan is sized on the cash flow moving through your accounts.
What your deposits qualify you for in your market.
Alt-doc programs read 12 months of business or personal bank deposits instead of tax returns. Enter your average monthly deposits and see the income a lender would credit you.
The expense factor is set by the lender from your business type and profit-and-loss statement; it is not a number you choose. This widget quotes no rate and no payment.
Program parameters shown update from Lendmire’s centralized guideline source.
Estimate
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. Deposit average, expense factor, and housing ratio are editable assumptions; the expense factor a lender applies is set from your business type and documentation. No interest rate or monthly payment is quoted here. Purchase capacity is a simplified illustration and does not account for taxes, insurance, HOA dues, or other debts. Alt-doc income documentation is available on consumer mortgages in the states where Lendmire is licensed for consumer lending; actual terms vary by lender, borrower, and property.
Two versions exist. A rate-and-term refinance changes the loan’s terms and pays off the old balance. A cash-out refinance borrows more than you owe and hands you the difference. Both can run on bank statement documentation.
The product exists because traditional income documentation and cash flow tell different stories. Business deductions lower taxable profit, and the IRS instructions for Schedule C describe how a sole proprietor reports business income and expenses. A conventional underwriter reads the bottom line. A bank statement lender reads the money that actually came in.
Our program sits in the non-QM world. Non-QM means a mortgage that falls outside the standard qualified-mortgage box. It is not automatically risky.
How Does Underwriting Actually Treat Your Statements?
An underwriter reads your statements line by line, totals the deposits that count as income, and averages them over the lookback period. Then comes the expense factor for business accounts. The result is a monthly qualifying income figure.
Here is the sequence, step by step.
1. You supply statements. Across the wholesale network, 12 months is the typical ask for the programs described here. Scotsman Guide notes that the industry range runs 12 to 24 months of personal or business statements. Some lenders use 24 when it helps the file.
2. The underwriter sorts deposits. Customer payments and sales count. Transfers between your own accounts do not. Neither do loan proceeds or gifts.
3. Business statements get an expense factor. Gross deposits are not take-home pay. The lender subtracts a percentage for the cost of running the business. That percentage is lender-specific, and it can shift with your industry and the file. Nobody can promise you a universal number. Anyone who does is guessing.
4. The remaining deposits are averaged. Net eligible deposits divided by the months in the lookback gives the monthly figure.
5. Debts are compared to that income. The lender weighs your proposed housing payment and other monthly debts against the qualifying income. Credit profile, LTV, and reserves then shape the pricing and the leverage.
6. The appraisal comes in. On an owner-occupied home, this is a standard appraisal of value. A rent schedule is not part of the picture, because rent is not what qualifies you.
Every file is underwritten individually, and every lender sets its own overlays.
Why This Isn’t a Stated-Income Loan
Bank statement lending is documented lending. Before 2008, “stated income” meant you wrote a number on an application and nobody checked. Today the lender must verify income with reliable third-party records. Bank statements are exactly that.
Most non-QM lenders must still show a reasonable, good-faith determination that you can repay. A bank statement program meets that standard with a different set of records. Qualification is on documented income under the applicable program, subject to lender guidelines.
Credit quality still matters inside this world. Scotsman Guide reporting on loan performance data found that impairment rates climb sharply for borrowers below 660 FICO. The label does not protect a weak file. A clean file with real deposits and solid credit, by contrast, is evaluated on its documented strengths. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
What Leverage and Loan Sizes Are Typical?
On a primary residence, select lenders in the network go up to 90% LTV for purchases and rate-and-term refinances. LTV means loan-to-value: the loan balance as a percentage of the home’s appraised value. Stronger files earn the top of that range. Legal commentary on the final ability-to-repay rule says creditors must verify income or assets using third-party records, which is why bank statement programs document repayment ability through account history rather than tax returns.
Here is the working picture, always subject to lender guidelines:
| Scenario | Typical ceiling |
|---|---|
| Primary residence, purchase or rate-term | Up to 90% LTV |
| Primary residence, asset-depletion option | Up to about 80% LTV |
| Investment property, cash-out | Around 75% LTV |
| Investment purchase on alt-doc | Varies by lender |
Loan amounts generally run from $125,000 to $3,500,000. Reserves are commonly about six months of the housing payment. Reserves are cash you keep in the bank after closing. Expect the lender to want proof of them.
Asset depletion is the other income path. The borrower is reviewed against liquid assets instead of monthly deposits. It is useful when you hold plenty of cash or securities but irregular income. It runs lower on leverage, as the table shows.
The Structures and Variations
The same documentation idea shows up in a few shapes. Which one fits depends on your goal and your accounts.
Business statements versus personal statements. If your business income flows through a business account, lenders usually use business statements with an expense factor. If you deposit business income into a personal account, personal statements may work with little or no expense adjustment. Lenders differ on this, which is why comparing programs matters. Our wholesale view helps here. One lender may haircut a file hard while another treats the same deposits more favorably.
Rate-and-term versus cash-out. Rate-and-term keeps the loan balance roughly where it was and changes the terms. Cash-out pulls equity. Cash-out usually carries tighter leverage and more seasoning. Seasoning is the time you must have owned the property before refinancing against its value.
Asset-depletion. Covered above. Pick it when assets, not deposits, tell your story best.
Term length. Alt-doc terms follow each lender’s program sheet. Do not assume a 40-year or interest-only option exists on a bank statement loan. Those structures live mainly on the DSCR side.
Where the General Rule Breaks
The basic recipe is simple. These are the places files go sideways.
Occupancy changes the whole file
A refinance on your primary residence or second home is a consumer mortgage. Standard consumer disclosure rules apply, known as TRID. A bank statement loan on a non-owner-occupied rental, including a short-term rental, is a business-purpose loan. Those loans are exempt from TRID.
That split matters when a property changes hands in your life. Move out of a house and rent it, and you have a different loan type. Keep the two straight and you pick the right documents the first time.
Pure rentals usually move to DSCR
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. DSCR stands for debt service coverage ratio. It is the property’s monthly rent divided by its monthly debt obligations. For a rental you do not live in, that is usually the cleaner path. Your personal bank statements stop being the main exhibit.
Where the rent schedule does matter, the appraiser uses a rent exhibit. Fannie Mae’s Form 1007 is the one-unit version, and Form 1025 covers 2-4 units. They matter when the property’s income is doing the qualifying. They do not drive a primary-residence bank statement file.
For the full side-by-side, see this comparison of DSCR versus bank statement loans for investors. Lendmire’s complete DSCR loans guide covers the investor side in depth.
Cash-out has a clock
Lenders want time on title before they lend against appreciated value. How long varies by lender and by LTV. Plan around the strictest reasonable overlay, not the friendliest one you hear about.
There is an exception for all-cash buyers. Some programs allow a faster refinance, capped at documented purchase cost instead of current value. Terms are lender-specific, so ask before assuming.
Large deposits and messy accounts
One big deposit does not sink a file. An unexplained one can distort your average or get excluded. Document the source. An inheritance, a property sale, or a transfer from a savings account all need paper behind them.
Mixed accounts are the other classic problem. When personal spending and business revenue share one account, the underwriter has more sorting to do. Cleaner separation can help.
Second homes
A second home sits closer to the primary-residence side of the line than to the rental side. Leverage and eligibility differ from a primary.
What Do Lenders Want to See in the Statements?
They want steady, explainable money. A few patterns separate smooth files from rough ones.
- Consistent deposits. Seasonal swings are fine if you can explain them. Wild, unexplained spikes invite questions.
- Real balances. Frequent overdrafts and returned items signal stress.
- Clean sourcing. Every large deposit needs a plain explanation.
- Complete records. A missing month can stall everything. Pull every page of every statement.
- Ownership proof. Lenders commonly want evidence of your business ownership stake and how long you have operated.
Keep the accounts boring for the lookback period. Boring wins.
A Scenario: Strong Cash Flow, Thin Tax Return
Picture a contractor who runs her business through an LLC. Her tax return shows modest net profit after equipment write-offs, vehicle costs, and payroll. Her business account tells a different story, with steady deposits month after month.
A conventional lender reads the tax return and sees too little income to refinance her primary residence. A bank statement lender averages her deposits, applies an expense factor, and gets a much stronger qualifying figure. Whether she clears depends on the factor, her credit, her reserves, and the LTV she wants. Subject to lender guidelines, that file now has a path.
Now flip it. Suppose she also owns a rental house with solid rent. That property belongs on a DSCR loan, where the rent against the payment carries the file. Using bank statements on the rental would mean over-documenting the wrong thing.
Here is the practitioner view from the wholesale side: self-employed investors often have two different documentation problems at once. The home needs bank statement income. The rentals need property income. Matching each loan to its occupancy keeps both files simple.
Should You Use This or Something Else?
Bank statement is likely the right fit if you are self-employed, live in the home, and want to refinance. It also fits when deductions keep your tax return from reflecting your cash flow. It is probably the wrong fit if the property is a rental, or if your income is a plain W-2 salary. Salaried borrowers usually do better on conventional documentation.
Other ideas worth weighing before you apply:
- Rate-and-term versus cash-out. If you do not need the equity, skip the cash-out. Lower leverage tends to make a file easier.
- Reserves. Know how much cash you will show after closing. Reserves commonly run around six months of the housing payment.
- Your credit profile. Pay down revolving balances before the lookback ends if you can.
- Tax treatment. Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
Key Terms Defined
Bank statement loan: A mortgage that is reviewed around averaged deposits from bank statements instead of conventional personal-income paperwork.
Non-QM: A mortgage that falls outside the standard qualified-mortgage rules and uses alternative documentation.
Expense factor: The percentage a lender subtracts from business deposits to estimate the cost of running the business.
LTV: Loan-to-value, the loan balance as a percentage of the property’s appraised value.
Seasoning: The time you must have owned a property before a lender will refinance against its value.
Reserves: Cash and liquid assets you keep after closing to cover future housing payments.
DSCR: The property’s monthly rent divided by its monthly debt obligations. It is the measure used on rental loans.
Frequently Asked Questions
Can I use a bank statement loan to refinance an investment property?
Sometimes, though it is rarely the best tool. Cash-out on an investment property typically tops out around 75% LTV, subject to lender guidelines. Leverage on an investment purchase using alt-doc varies by lender. For most rentals, a DSCR loan is the cleaner fit because the property’s income carries the file.
How many months of statements do I need?
Twelve months is the typical ask for the programs in our network. Some lenders accept 24 months, and a longer window can help if your recent year was unusually strong or weak. Ask which lookback your lender will use before you gather documents.
Does a large one-time deposit hurt me?
Not automatically. The deposit just needs a documented, non-income source such as an asset sale or inheritance so it does not inflate your average. Unexplained deposits can be excluded from income.
Is a bank statement loan the same as a no-doc loan?
No. It relies on third-party bank records and a full underwriting review. The statements are the documentation.
Where does Lendmire offer this?
Lendmire is a mortgage broker, and its consumer mortgage licensing covers 16 states. Eligibility, program terms, and approval depend on the lender, your file, and the property. Nothing here is a commitment to lend.
Next Step
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. For your own home, a bank statement review is a good first conversation. Reach the team at 828-256-2183 or request a quote.
Self-employed owners often carry two loans that need two different documents, and sorting the occupancy first is what keeps both of them simple.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. IRS – Instructions for Schedule C (Form 1040)
2. Scotsman Guide – Helping borrowers fit the boxes by getting hands-on with non-QM
3. Scotsman Guide – Non-QM gaps widen between full-doc and alt-doc loans
4. Fannie Mae – Form 1007 Single-Family Comparable Rent Schedule
This article is part of Lendmire’s bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Second-home Financing In Sanibel For Business Owners · Asset Depletion Mortgages In Palm Springs: Assets, Not Income · Does Loan Size Change The Down Payment On A Bank Statement Resort Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.